The settlement resolves allegations that Adventist paid bonuses to employed physicians based on a formula that improperly took into account the value of the physicians' referrals to Adventist hospitals, according to the Department of Justice.

The settlement announced today resolved allegations that the hospital district provided compensation to nine employed physicians that exceeded the fair market value of their services. The United States contended that these agreements violated the Stark Statute and the False Claims Act. The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them.

The settlement resolves allegations that Vanguard-owned Arizona Heart Institute in Phoenix submitted false claims to the Medicare program by knowingly paying certain physicians salaries and bonuses that were above fair market value and in violation of the Stark Law and the Anti-Kickback Statute.

Physicians who enter into compensation arrangements such as medical directorships must ensure that those arrangements reflect fair market value for bona fide services the physicians actually provide. Although many compensation arrangements are legitimate, a compensation arrangement may violate the anti-kickback statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of Federal health care program business. OIG encourages physicians to carefully consider the terms and conditions of medical directorships and other compensation arrangements before entering into them.

OIG alleged that Ripon paid remuneration to certain physician-owners of physician practices through two lease arrangements. OIG contends that such remuneration created prohibited financial relationships and Ripon presented claims for designated health services during that resulted from prohibited referrals.

OIG alleged that Salinas paid remuneration to a health care company owned and operated by two physicians on staff at Salinas. OIG further alleged that the remuneration paid took the form of payments under an arrangement for Salinas to pay the health care company to rent a laser when the laser was not needed by Salinas because a second laser had been purchased by Salinas for its own use. OIG contended that Salinas failed to discontinue the arrangement after purchasing its own laser because continued payments to the health care company took into account the value of the company owners' referrals.

OIG alleged that St. Agnes paid remuneration to a cardiology practice in the form of equipment, supplies, staff and space needed to provide certain nuclear diagnostic cardiology testing services. OIG alleged that the cardiology practice paid St. Agnes less than fair market value for these services.

Ashland Hospital Corp. d/b/a King’s Daughters Medical Center (KDMC) has agreed to pay $40.9 million to resolve allegations that it submitted false claims to the Medicare and Kentucky Medicaid programs for medically unnecessary coronary stents and diagnostic catheterizations and had prohibited financial relationships with physicians referring patients to the hospital, the Justice Department announced today.Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division, U.S. Attorney Kerry Harvey for the Eastern District of Kentucky and Special Agent in Charge Derrick L. Jackson at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Kentucky region made the announcement.“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General Delery. “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs...

Medtronic Inc., of Fridley, Minnesota, has agreed to pay the United States $9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic, the Justice Department announced today. “Improper financial incentives have the potential to compromise physician medical judgment,” said Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division. “This case demonstrates the Department of Justice’s commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making.”The United States alleged that Medtronic caused false claims to be submitted to Medicare and Medicaid by using multiple types of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators. Specifically, Medtronic allegedly induced physicians to use its products by: 1) paying implanting physicians...